Monday, April 16, 2012

LOOK WHAT A GOOD IDEA CAN DO!

This Sunday (April 8), a small company changed its fortunes forever. Instagram was started two years ago, but this Sunday, it became more valuable than even The New York Times. The reason being Facebook acquired it for $1 billion few days back; causing quite a flutter among industry watchers. Why did it invest so much in a company, which hardly made any profits, is a fresh start up, and to top it all, is just an ‘app developer’ and its claim to fame is a ‘photo-sharing’ application that it developed for the iPhone? Add to this the fact that it does not even have a website to call its own, for all its features are designed for the mobile phone.

Well, there is more to it than these obvious facts. Instagram may just be an application for the mobile phone, but it has been downloaded by 50 million users, and that is something worth noticing. Though still much smaller than Facebook, the power of this company lay in its idea. Instagram is about photo sharing, but so is Facebook. However, Instagram is only mobile phone-based and Facebook’s revenues through its mobile application are zilch. Mark Zuckerberg saw this as a huge opportunity to make Facebook’s presence stronger in the mobile sector. When Zuckerberg started, it was all about the web. Today, who cares about the web? It all happens on the mobile phone, and Mark knows it best. So for a company that was valued at $500 million a few weeks back, Zuckerberg did not hesitate to double his offer and as expected, the young founders of Instagram – Mike Krieger and Kevin Systrom – found it irresistible and sold it. A simple idea of sharing your sometimes grainy mobile photos and making them works of art by using an application is today worth $1 billion. That’s what a good idea can do, and that’s exactly what it did for Instagram; a 551-day-old profitless tech startup!GOOD IDEA IS GOOD BUSINESS

Good ideas make you rich but not the reverse. As William Cameron said, “Money never starts an idea, it’s the idea that starts the money.” If you have an idea that came out of your passion for something and not for the objective of making money, it’s going to make you a lot of money, for that’s what makes legends. Not just the knack of inventing and creating new ideas but even the ability to identify the potential of new ideas is what makes businesses successful. A genius is someone who can make use of the simplest of ideas. In fact, the simpler an idea, the more profitable it is. Think about ‘Hotmail’, a simple idea of sending mails for free over the internet, which made its founder Sabeer Bhatia richer by $400 million back in 1997. PayPal, a simple idea of making payments online, made its founders richer by $1.5 billion when eBay bought it. Instagram, the most recent company creating waves, is also a simple idea. In fact, it’s not even a new idea, for Flickr does the same; just that it’s for the web while Instagram is for the mobile. Flickr also made money for its founders when it was bought by Yahoo! a few years back

A successful businessman is one who keeps an eye open for ideas with potential. When eBay acquired PayPal, it saw a potential and today, Paypal is contributing in revenues as much as eBay’s core business. Something similar is what Mark Zuckerberg saw in Instagram. Those were not the profits of the company but its potential to grow which attracted him to it; for no one understands the model of establishing an audience before generating sales better than him. When he made Facebook in his Harvard dormitory, he wanted it to become popular, to be liked by youngsters and not make money. Instagram, too, was made with the same philosophy and is loved by its users. They love it so much that they would not move to any other application easily. Love is what makes the world go round; surprisingly, even the business world, and no one knows it better than Apple. It is most loved, has a cult-like following and its consumer base is most loyal. Michael Dell once said that Apple should close down while it still had something to return to its investors. This same company today has passed Exxon-Mobil as the world’s most valuable company and has bigger financial reserves than the US government! For a company that many thought would close down soon, it’s not done too bad. Even though Steve Jobs is no more with us, but the world will not forget him for his iPad. It was a new way of looking at the dying market of tablets. Thanks to the iPad, the tablet market is the most thriving one with new consumers being added every day.

In fact, his iPad has been responsible for infusing fresh life not just into the tablet market but into so many others too. Magazines and newspapers are finding an innovative way to increase the life span of their products. The iPad has made magazines more user friendly, more trendy and more attractive. Schools are finding it easier to teach reluctant kids, making subjects more fun and the teaching style more interactive. It’s Apple and it’s iPad and iPhone that started a whole new business of ‘apps’ and one company for sure (Instagram) is thanking Steve Jobs today for making them billionaires!

A good idea has the power to change a lot of things and inspire so many others too. In fact, one idea can take so many different proportions that could have never been imagined. As Pablo Picasso said, “I begin with an idea and then it becomes something else.” The iPad was just an idea and today it is the new way of doing business for many companies.

Similarly, Hunger Games was just an idea for a novel and today it has spawned so many businesses. When Suzanne Collins wrote the book, little did she know the ripple effect it would create. Even before the film was released, Lionsgate, its producers, and a host of others built a whole world of marketing around it. Set in the future, the movie is about a place named ‘Capitol’, which selects a boy and a girl from the twelve districts that it governs and makes them fight to death on a live television show, for the thrill of the Capitol’s residents and to keep the districts under full domination. It revolves around a brave girl who is also a sharp shooter and how she not just wins but changes the rules of the game too. A movie that keeps you at the edge of your seat right till the end is also an important lesson in marketing. In a world full of male superheroes, here comes a young ‘girl-superhero’. The audience loved her for they had seen none like her. Her powers (shooting with a bow and arrow), too, were not in-born but could be nurtured. She was a dream that could be achieved and her effect on the young audience has worked like magic. The idea of the story was so brilliant that it influenced many. China Glaze, a cosmetics company, has launched a Hunger Games-inspired nail polish line and yes, you guessed it, it has twelve shades – one for each district. Never to be left behind, Facebook has a game called The Hunger Games adventures, where players build their own traps, concoct potions and even grow food. New York Sports Club has launched a new workout inspired by Hunger Games, which has moves like those used by the girl Katniss and her friends for survival. The winner of the workout is the one who is fit to survive the treacherous arena that Katniss survived in the movie. Very soon, we might see a Barbie changing from a dainty little girl to one with a bow and arrow like Katniss (Jennifer Lawrence), the new heartthrob of young fans. The sound track of the movie soared to the number one slot, making the singer Taylor Swift most wanted. It’s remained the top film for three weeks and even the mighty Titanic could not overshadow it. Doing a business of over $300 million, the film shows no signs of slowing down and neither do the marketers who just can’t stop finding ways of making the most of this mania.

One story changed the fortunes of not just the author (she is the best selling author on Amazon and everywhere else), but also of a host of other businesses. The power of an idea could not have been better explained than the way it was done in the movie Inception, where Leonardo DiCaprio is on a mission to plant an idea in the mind of the heir of a business tycoon to dissolve his deceased father’s business empire. He rightly says, “What’s the most resilient parasite? An idea. A single idea from the human mind can build cities. An idea can transform the world and rewrite all the rules.”

In fact, a whole lot of new inventions are doing just that. If the iPad shook up the world in 2010, then wait to see what these can do. A new technology named DIDO will eliminate the need for cell phone towers and you can say goodbye to slow download speeds forever. There is a printer, which will be able to print skin. You can keep your palm on the device and the cartridges filled with skin cells will print out your skin. Although still in the development stage, a lot of burn victims and soldiers are eagerly waiting for it.

There is going to be a world of opportunities that is going to open up; just keep a lookout for the new ideas around you and within you. Be not afraid of expressing your view even if it sounds silly; for most often, that is the foundation of a successful idea. As Einstein said, “If at first it’s not absurd, there is no hope for it.” Remember that there is nothing more powerful than a good idea. Have faith in your ideas and don’t let somebody’s yawn or sneer kill it. You owe it to yourself and the world, for you know what a good idea can do.

About Me

Rajita Chaudhuri is the Dean , Center for Higher Education @ IIPM. She is the Consulting Editor of '4Ps,Business&Marketing' magazine and 'MYOD'. She is the winner of the "Best Faculty in Marketing".Her passion is teaching.

Prof. Rajita Chaudhuri speaking at 'Thorns to Competition' book launch

IIPM 4Ps Bschool Quiz with SRK

Prof. Rajita Chaudhuri's Executive Communication Class - April 2011

Prof. Rajita's Class on Team Building

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